NETEASE INC(9999.HK):STRENGTHENED VISIBILITY WITH FRUITFUL PIPELINES IN 2H24
NETEASE INC(9999.HK):STRENGTHENED VISIBILITY WITH FRUITFUL PIPELINES IN 2H24
We expect NTES to report 2Q24 results in end August. We model 2Q24 total and core online game revenue to increase 8% YoY and 11% YoY respectively, -1%/ -3% below consensus. GPM/ Non-GAAP NPM remain solid at 62.2%/ 30.9%. We believe Co. will tap into a fruitful 2H24 with the launches of various new titles across game genres, terminals and geographies, as well as Blizzard games' resumptions domestically. We expect PC/ mobile game revenue will log 6% YoY/ 7% YoY respectively in 2H24 despite PC impact of monetisations/ functions and Treasury Pavilion adjustments of 3 legacy PC titles primarily in May 2024. Maintain BUY and TP of US$130/ HK$204.
我們預計NTES將在8月底公佈2Q24業績。我們模擬2Q24在線遊戲總收入和核心收入同比分別增長8％和11％，比共識預期低1％/ 3％。商品毛利率/ 非GAAP淨利潤率仍然堅挺，分別爲62.2％/ 30.9％。我們相信，隨着在遊戲類型，終端和地理位置方面推出各種新遊戲和暴雪遊戲國內恢復上市，公司將進入2H24的豐碩收成期。我們預計儘管在2024年5月主要是三款傳統PC遊戲的貨幣化/功能和中央大廳的調整影響下，PC/手機遊戲的收入將同比增長6％/ 7％。維持買入和US＄130/ HK＄204的目標價。
Key Factors for Rating
評級的關鍵因素
Fruitful 2H24; Delayed WWM PC. We expect strengthened 2H24 financial visibility with official announcements of release dates of new titles amid intensified competition. In particular, we believe PC game revenue will resume positive QoQ territory in 2H24. Releases of Once human PC (七日世界) globally in July, WWM PC (燕云十六声) domestically in 2H24 (delayed from July 2024) and Rusty Rabbit (PC and console) overseas in September, as well as gradual Blizzard games resumptions domestically in 3Q24 will fully offset the impact of monetisations/ functions and Treasury Pavilion adjustments of legacy FWJ, Justice, WWJ PC in May 2024. Despite the high base, we still expect mobile game to grow 7% YoY in 2H24 mainly driven by Naraka mobile (est. RMB6bn grossing in 2024), evergreen titles, rejuvenated existing ones such as Infinite Borders and Identity V and potential new titles including Once human and WWM mobile. We expect Co. will be dedicated to their global vision and expect global 1P new titles to publish starting from 1H26E. According to our estimations on separate key titles with latest information, we nudge down our 2024-26E pure online game revenue forecasts by 2% while uplifting our 2025-26E adj. EPADS by 1% mainly due to uplifted GPM and stringent G&A.
2H24將是豐收的，WWm PC推遲。隨着發佈新遊戲日期的官方正式公告，我們預計加劇競爭的同時將會有強化的2024年下半年的財務可見度。特別是，我們相信PC遊戲收入將在2H24恢復正面季環比增長。 全球發售的Once human PC（七日世界）於7月，WWm PC（燕雲十六聲）在國內於2H24（推遲自2024年7月）以及Rusty Rabbit（PC和遊戲機）於9月在海外推出，以及Blizzard遊戲在3Q24逐步恢復國內上市，將充分抵消FWJ，Justice和5月2024 WWJ PC遊戲的貨幣化/功能和中央大廳調整的影響。儘管基數較高，我們仍預計手機遊戲2H24將增長7％，主要由Naraka手機遊戲（預計2024年收入超過60億元人民幣），實力不減的既有遊戲以及新版《無限邊際》和《第五人格》等潛在新遊戲推動。我們預計公司將致力於實現其全球願景，並預計從1H26E開始發佈全球1P新遊戲。根據我們對各個關鍵遊戲的最新信息的估計，我們將每個純在線遊戲2024-26E收入預測下調2％，同時將每個2025-26E調整後每股收益（adj. EPADS）上調1％，主要是由於GPm上調和緊縮的G＆A造成的。
2Q24 preview: resilient mobile while PC impacted; solid margin. We model total revenue to deliver 8% YoY to RMB25.9bn, -1% below consensus. Pure online game revenue will rise 11% YoY to RMB19.1bn, -3% miss consensus mainly due to monetisation/ function adjustments of FWJ, Justice and WWJ PC in May 2024. Mobile games remain solid at 18% YoY to RMB14.9bn, stably contributing c.78% of pure game revenue. GPM of 62.2% is in line with streets' expectation. GAAP OPM slightly exceeds consensus at 28.6%.
2Q24預覽：手機強勢，PC受到影響；較高的利潤率。我們模擬總收入同比增長8％至259億元人民幣，比共識預期低1％。純在線遊戲收入將同比增長11％至191億元人民幣，預期低於共識3％，主要是由於FWJ，Justice和WWJ PC在2024年5月的貨幣化/功能調整。移動遊戲仍然強勁，同比增長18％至149億元人民幣，穩定貢獻純遊戲收入的約78％。62.2％的商品毛利率符合預期。GAAP OPm略高於共識預期，爲28.6％。
Key Risks for Rating
評級的主要風險
Downside risks: i) weak macro and online discretionary spending recovery; ii) game regulations; iii) delayed pipelines; iv) competition; v) destructive investments; vi) dampened partnerships; and vii) ADR delisting.
下行風險：1）宏觀經濟疲弱，網絡在線福利支出還原；2）遊戲監管政策；3）發佈計劃延遲；4）競爭；5）毀滅性投資；6）消極的合作關係；7）ADR退市。
Valuation
估值
Maintain BUY and our TP of US$130/ HK$204 derived from: i) US$110 on 15.0x FY2024E Non-GAAP EPADS of US$7.3; 2) US$2 from stake in Youdao and Cloud Music; and 3) US$18 from net cash.
維持買入，根據以下計算得出我們的US＄130/ HK＄204的目標價：1）基於US＄7.3的FY2024E的15.0倍非GAAP每股攤薄收益；2）來自Youdao和Cloud Music股份的US＄2；3）來自淨現金的US＄18。
譯文內容由第三人軟體翻譯。